Phase-Out of Federal Unemployment Insurance Will Leave More Workers Without Aid in June

The economy added only 69,000 jobs in May, according to the Bureau of Labor Statistics’ monthly jobs report released on June 1. After a robust start to the year, May marks the third straight month of disappointing growth. The unemployment rate was relatively unchanged, at 8.2 percent, and all of the slight increase was because more people are coming back into the labor market. 

The disappointing job growth, combined with cuts in unemployment assistance that are hitting hundreds of thousands of workers, adds new burdens for the long-term unemployed and new challenges for the economic recovery. Of the 12.7 million out-of-work Americans, nearly 43 percent have been jobless for six months or more.

“The good news in today’s otherwise disappointing jobs report is that more people have jobs, and all of the increase in the numbers of unemployed workers is because more people are returning to the labor force,” said Christine Owens, executive director of the National Employment Law Project. “But let’s not sugarcoat things: Job growth at half of what we need simply to keep up with population growth underscores the urgency of action by Congress and the President to turn the economy around. The deficits we face today will only deepen tomorrow if we don’t respond quickly, powerfully and effectively to the jobs crisis. This is not a moment for deep budget cuts or political posturing. Congress and the President must come together to build a jobs program that will put America back to work.”

New unemployment rate requirements in June will reduce jobless aid

Today the National Employment Law Project issued a fact sheet detailing the premature loss of unemployment insurance that unemployed workers will experience in the coming months due to legislation Congress passed in February. By the end of June, the permanent Extended Benefits program, which since 2009 has provided 13 to 20 weeks of benefits for workers in 42 high-unemployment states, will have ended in all but four. The federal Emergency Unemployment Compensation (EUC) program, first enacted in July 2008, will also be scaled back in June, with benefits pared in 24 states starting that month, and cuts extending to other states through the summer.

May’s employment report by the numbers

May is the third straight month of jobs gains under 200,000. With the downward revision of jobs added in April to 77,000, the average job growth over the first five months of 2012 is now at 165,000 jobs. The following are items of interest in this month’s report:

• Public sector job losses. Public sector employment declined by 13,000 in May. Since the official end of the recession in June 2009, the public sector has lost over 650,000 jobs on net.
   
• Employment and labor force participation. The share of the working-age population with a job ticked up in May, to 58.6 percent, as did the share of Americans in the labor force, to 63.8 percent. Labor force participation is likely to remain depressed until job growth is more vigorous and consistent.
   
• Long-term unemployment. The duration of unemployment is still very long: on average, unemployed workers were out of work for 39.7 weeks, or for about 10 months, in May. Over four in ten (42.8 percent) unemployed workers have been out of work for six months or more.
   
• Underemployment. Underemployment continues to affect a significant share of the labor force. In addition to the unemployed, 8.1 million are working part-time involuntarily, up from 7.9 million last month. An additional 2.4 million want to work and are available for work, but have given up their search. Together, this means that 23.2 million are either unemployed or underemployed, resulting in a “real” unemployment rate of 14.8 percent.
   
• Signs of future hiring. Hiring in temporary help services, normally a predictor of future hiring, increased by 9,200. Average hourly wages ticked up by $0.02, yet the average workweek ticked down by 0.1 to 34.4 hours.
   
• Jobs deficit. The economy needs stronger, sustained growth to close the jobs deficit, which still stands at 9.9 million jobs as of May. This represents the 5.0 million jobs lost on net since the start of recession, as well as the 4.9 million jobs the economy should have added over this period in order to account for normal labor force growth.

The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research, education and advocacy on issues affecting low-wage and unemployed workers. For more about NELP, visit www.nelp.org.